Systems consist of stocks and flows, they have inputs, outputs and feedback loops.

A simple example is a water-tank. Turn on the in-tap and it fills. Turn on the out-tap and it empties. Juggle how much each tap is turned, and you can balance the level in the tank – the same amount going it as is going out.

Control the in-tap with a ball-cock, and the system has become partly self-regulating. It can still empty (if the out-tap is more open than the in-tap) and it has no control over the supply-system which feeds the in-tap nor does it control where the water goes afterwards. Those are parts of wider systems.

The problem is obvious. The water in that tank is used to grow food. If we only look at the tank system and we want to grow more food, we assume the need is for more or bigger tanks. The tank-builders assure us they can build them, the farmers know how to irrigate using them, and off we go. But the supply-dam is finite; at some point the tank system runs into the limits of a bigger system. Ultimately, even an enlarged supply-dam runs into catchment limitations. At the output end we can run into nutrient-flushing or salinity issues. The bigger we scope, the less likely that we run into problems unknowingly.

Feed-back loops are an intrinsic part of systems. The farmers realise that their tanks aren’t filling fast enough anymore and push for a bigger storage dam. The bigger dam allows more tanks, until there are too many again. Oscillations are the obvious hallmarks of feed-back loops, as those with incomplete information react to change, with some degree of time-lag. Financial boom and bust is one such oscillation, although growth will continually alter its resonant frequency.

Feed-back loops can also self-cancel and even reverse. The USA, for instance, was once seen as empty. The stock can be defined as ‘overcrowded people from elsewhere’, the flow was ‘in’. indeed, the poem in the Statue of Liberty ends: “Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!” The USA is now full and Trump is merely performing the systemic function of a ballcock. We need to track such changes and ask why the change?

Farmers who only see their tanks filling, react slower to change than those who monitor the level in the dam, but even the latter will only be reactive – it has to noticeably empty before alarm-bells ring. Further down the chain – buyers of the food from the farms, say – the signal is so time-lagged as to be of no use. By the time supermarket shortages show up, there is no reaction-time left.

The ‘invisible hand’ - so believed-in by so many for so long – was merely a collection of feed-back loops and lag-times and imperfect information-streams, all dependent on a bigger system. (We ought to know this - no perfectly-informed, in-time system would see the Dow going up and down daily by numbers of percents). The more detailed the systems modelling is, the more accurate it is likely to be and the more complex it will appear – ‘spaghetti and meatballs’ being one apt description.

The number of tanks in our hypothetical system can either grow, remain static or reduce. All growth within a physical system will come up against a physical limit, or limits. Exponential growth (the usual feed-back scenario is exponential, whether it be up or down) runs into physical supply-rate limits with bewildering rapidity, somewhere around the ‘50% depleted’ mark in the case of finite resources. Reducing quality is, of course, an increasingly forceful feed-back loop too, driving things like ever-more tons of overburden needing to be removed, per ton of resource mined. Some can be temporarily alleviated – increasing the tank manufacturing-rate, say – but there will always be an ultimate physical limit to every physical growth-model. Perhaps the resource the tanks are made of becomes depleted. Perhaps the tanks cover so much of the land once irrigated, that water-demand plateaus.

The goal of every system, will be what every system achieves - until it runs into those limits. If the goal is more money in farmer’s bank accounts, those accounts will increase until food-buyers run out of ability (or willingness) to pay. If the goal is to produce more food, this will happen until some physical limit (photosynthesis per acre, perhaps) is met. If the goal is better water-quality, the first two will be impacted negatively, all other things being equal.

If there is capacity in the system – a buffer – then it is capable of temporary over-supply. If a farmer starts with a full tank at the beginning of a season and finishes it with an empty one, he/she can use water at more than the rate the in-tap can supply. The danger is clear – if a collection of farmers relies on signals at their out-taps, the dam can be emptied faster than the sustainable rate. Obviously, the problem is bigger when the buffer is an untapped planet.

What those out-tap-monitoring farmers were doing was mistaking a flow for a stock. Another example would be a Tourism Minister using back-cast visitor numbers to project future increases, while failing to measure the future availability of jet-fuel. We do the same by valuing everything in ‘money’. We assume that applying more ‘money’ will increase the flow of whatever physicality we want more of. Real signals come from well outside the money system – a lag-time we can no longer afford - yet our insistence on the ‘money’ goal at the expense of science (https://www.bwb.co.nz/books/silencing-science) continues.

A classic global-scale example of this lack-of-signal from the making of money, was the ozone hole over Antarctica – something which had to be physically addressed through the global application of rules. Indeed, if ‘cheap’ alternatives to CFC’s had been unavailable and we’d continued to choose ‘making money’ as our system goal, it is possible we would have yet to address the problem. We would likely see paid obfuscation (an entirely logical result of the chosen goal) as we do with Climate Change.

We are big enough to be globally-forcing now, as the ozone incident indicated. Other problems which threaten our physical existence include Climate Change, fossil-fuel depletion (those two comprising the next biggest feed-back loop after population/resource-demand), aquifer draw-down, desertification, species extinctions and lack of biodiversity. None of these are signalled well enough or early enough by the monetary system. Its goals – more money, GDP growth – either ignore these existential threats (often by calling them ‘externalities’, proof that their system is scope-limited) or they count them as plusses (as the increasing manifestation of those global problems, paralleling ‘economic’ growth, proves).

Those who would rely on financial systems are thus blind sided to the very inputs without which the ‘money’ won’t buy the amount of the ‘water’ they expected to buy at the outlet-taps. A recent New Zealand classic, is the edict that went out to Local Government to ‘fund for depreciation’. No doubt that made sense on some office laptop, but the real degradation is to physical infrastructure – roads, sewers, services, buildings. The real need was for future machinery, materials and energy-supplies, to be physically earmarked and kept from present consumption. Ratepayers may well resent the ‘cost’ – but they miss the point in doing so, as do those who attempt to address physical ‘depreciation’ in a non-physical way.

Systems Analysis is only as good as its modelling. At best it can predict results if future paths are followed; it is no predictor of choices which may be made in the future. But it is very clear about the fact that stocks must be measured, not just flows. If we want future generations to prosper (and why become a parent if not?) we need the concept to be adopted at leadership level. Signal lag-time means that monetary/flow goals have to be at least secondary to stock-monitoring ones.

Our current leadership demonstrates the problem in two ways – Child Poverty and Housing Supply slash Land Supply. Both initiatives are doomed to failure for having failed to address the (rather obvious) feedback loops. If children are to have more water from a finite dam, you need a policy aiming at less children (unless you make big drinkers drink less – which will stave off but not fix your ultimate depletion or your per-head problems). If the houses (like the tanks) are sprawling onto land producing food for people who live in houses, sooner or later someone is going to be housed but hungry.

If our current leadership changed their goal, our system would change too. If long-term existence became the goal (and it’s hard to argue against the validity of that) then something like ‘Will the seventh generation of New Zealanders from now, thank us for this?’ would be an interesting yardstick. At the very least, sub-systems would be nudged in the direction of longer timeframes – no bad thing. The last time a society thoughtful enough to think in that manner, came up against a more short-term-oriented intruder, it was annihilated. The user of more resources-per-time, ‘won’. It is useful to look at the state of decay of the infrastructure the ‘winning’ culture built, and ask whether it was indeed a ‘win’?

Those who are rich will argue for a system where they can out-bid others for water, in our hypothetical system. The bigger question is what happens when the dam empties? No amount of bidding will supply water from the out-tap at that point. So the acquisition of more bidding-chips is demonstrably an invalid long-term goal. One wonders if they realise this? Angst (from a rising global echelon of water-deprived) can show up as refugee-streams or ‘terrorism’ or masses voting for those who promise hope – all indicators that the system is in trouble.

On the other side of the coin, central control has proven capable of incorrect decision-making too. But rules are needed, and those are more likely to be appropriate if they are appropriately weighted – continued ignorance is therefore another invalid goal. The best systems-approach initiative of recent years was China’s one-child policy (and look how that went down in non-systems society).

Systems are dynamic and have to be changeable – to be able to react and in the current case of our own species, to react to predictions. Our failure has been to specialise in small systems without adequate meshing. A manufacturer of out-taps, for instance, can only manufacture out-taps faster or more efficiently – no use in a dam-emptying scenario. Similarly, if the media interview that tap-manufacturer and report the projection that more taps will be made, they have no business extrapolating that as a guarantee of more water, coming soon….

We need to teach an expertise-meshing discipline (Systems Analysis being the academic name for such, although I prefer Buckminster Fuller’s ‘Generalism’ term). Ideally, this would permeate the education system and spread to voter-awareness – assuming we have that much feed-back lag-time up our sleeves! We need Cabinet to be – or to have access to – such a discipline. Perhaps enlarge the role of Chief Science Adviser to case all things, indeed a report from the CSA into the need to think in Systems, would be a good start.

After all, wellbeing will only exist as long as water flows from those out-taps …

*Murray Grimwood comments on interest.co.nz as powerdownkiwi. He says this article draws unashamedly on ‘Thinking in Systems’ by Donella Meadows, and "it should be essential reading for every board-member, politician and voter".

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12 Comments

So reduce the Immigration tap to a trickle and encourage some drainage to Australia.
Too many tourists? Turn down the flow but get them to pay more.
NZ is a premium destination for both immigrants and tourists.
'Nuff said.

As a quality specialist the problem with feedback loops PDK, is that politically driven egotists don't want to hear what they have to say. They have an agenda that doesn't usually mesh with reality, pragmatism, or even societal need. Politicians (at any level) are prime examples of this group. Goverment departments are riven with them as low managers on up. The rich and powerful will influence the politicians to undermine any such process. They will kill us all.

And a Ministry of Systems would have to be staffed, advised, consulted to and generally Run by, intellectual elites who, quelle surprise, would in practice be subject to exactly the same biases, tendencies to empire-building and self-aggrandizement, as are the politicians who would fund and thus ultimately Control it.

Unless, of course, the whole shebang was set up as a Religion, whereby everything you advocate could be created by Ecclesiastical Fiat, with dire sanctions for Non-Believers. It could even have a Systems Pope.....but I suspect that, in short order, there would be the usual carve-outs (Indulgences) for the Favoured ones.

No. No more systems for more "leaders" to run.
People need to be left alone without that. It will work itself out without Leaders prescribing more regulations and rules. For Gods sake, when will society/government wake up and stop adding more gunk to the works that inevitably cancels out the common sense factor. The invisible hand will do what it does all by its self thanks very much.....

Malthusian prognosis is intriguing, but has been wrong for centuries and still is. That Ministry of Systemic Failure (which will find lots of systems failing and require many baubles to operate), but will finally just end up simply killing off 80% of other people (Ministry officialdom to exempt selves from cull) and declaring it to be for their own good. That always is the Malthusian solution, which is why it should never be seriously contemplated in a sane galaxy.

Nothing prevents us from building a "bigger dam", when existing costs rise alternative sources become relatively more cost feasible. If the globe imposes a barrier, expand off the globe.

Good arguments, love most of the analogies... but had a little laugh at this one:

The USA is now full and Trump is merely performing the systemic function of a ballcock.

But aside from pun I'm sure wasn't intended - do you really think the US is full, in the sense of its population vs its biosphere or ecosystems capacity to self- sustain? Surely, given their current ecological footprint/consumption patterns, I would say, yes its full. But if we were talking about the bottom rung of Maslow's hierarchy (i.e., basic necessities of food, warmth/shelter, water), I'm not so sure. The population would have to be distributed differently/equitably (and of course the 'system' of property rights would never allow that) but I do think of the country as having a diverse lot of natural capital.

Most folk forget the huge input that is energy, and in the case of the US, the huge input of resources from outside.

I suspect the indigenous folk who lived there when Europeans first arrived, were living at a sustainable rate. You'll recall that I recon the sustainabile global population to be 2 billion at peasant level, one billion at ours, and that the US devours 25% of global energy. Work it backwards......

The best treatise on the subject US-wise is Kunstler's 'Long Emergency' - and it's well worth the read. Prescient, too, written in 2004.

He kind of works around the issue that is known as the “Energy/water/food” nexus. Lots of organisations and companies are working in this area. Even Shell realised that biofuel can’t bridge the gap between hydrocarbons and renewables because of vast water consumption for fuel crops displacing food production. This isn’t about politics it’s about resources.